Verena Ross, chair of the European Securities and Markets Authority (ESMA), said that the implementation of the Markets in Crypto Assets Regulation (MiCA) on December 30, 2024, represents a “significant step” toward regulating the cryptocurrency market. Ross made her remarks in an ESMA press release dated December 17.
“The entry into force of the MiCA regime from 30 December 2024 marks a significant step towards having a regulatory framework for the crypto market in place,” said Ross.
The ESMA has released its final set of technical standards and guidelines in preparation for MiCA’s implementation. These documents cover various areas such as market abuse, reverse solicitation, crypto-asset suitability, transfer services, classification as financial instruments, and information and communication technology (ICT) risk management.
According to the Autorité des Marchés Financiers (AMF), MiCA regulation requires crypto-asset service providers (CASPs) to obtain authorization before offering services. They can achieve this by securing approval from national authorities or notifying them if they are already authorized under specific statutes. CASPs demonstrating prior compliance with national laws can continue operations until July 1, 2026, while awaiting MiCA authorization. The regulation imposes obligations on CASPs including incorporation requirements, governance standards, client asset protection measures, and complaints handling procedures. CASPs must also adhere to prudential standards and maintain business continuity plans while complying with anti-money laundering and cybersecurity regulations.
French Member of Parliament Sarah Knafo described the regulation as a measure that presents significant challenges for industries such as cryptocurrency, artificial intelligence, and nuclear power. She suggested it discourages innovation and impacts creators. Mike Sarvodaya, founder of the Galactica Network, expressed concerns about the exclusion of decentralized finance (DeFi) from MiCA. He noted provisions like the “Travel Rule,” which requires identification of transaction participants for amounts exceeding 1,000 euros could lead to increased surveillance and delays in innovation due to token-launch approval requirements.
An example of a MiCA-approved coin is Circle’s USD Coin (USDC), now recognized as a regulated stablecoin in the European Economic Area (EEA). Richard Teng of Binance noted on X that USDC’s compliance as an e-money token aligns with the EU’s regulatory framework. He also highlighted the potential for additional MiCA-compliant tokens in the future.
ESMA is the European Union’s financial markets regulator focusing on investor protection, orderly markets, and financial stability. Established in 2011 following the de Larosière report, ESMA promotes consistent supervision across Member States and collaborates with banking and insurance authorities while reporting to EU institutions.
